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Thoughts about economic and business issues by and for the NYU Stern community -- and others with similar interests. The content reflects the views of individual NYU faculty but not necessarily those of NYU. Comments and suggestions welcome. Special thanks to our tech consultant, MBA alum Tim Reilly.

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Surge pricing in two markets

December 19, 2014

Larry White writes:

People get worked up when Uber charges more at peak times (New Years Eve) or gas stations raise their prices (remember Sandy?). Why don’t we see the same in business markets? The price of transporting oil in super tankers has gone up by a factor of eight since the summer, but we don’t see any complaints.

In economic terms, both situations show supply and demand at work — and working pretty well, I’d say. So why the different reactions? Why no accusations of “unfairness” or “gouging” when businesses are on both sides of the market? Are businesses simply more experienced in dealing with fluctuations? Less appealing as victims? More likely to understand how supply and demand work?